Oil Hovers Near $100 Amid Iran Tensions
Crude prices were steady Friday amid a sliding U.S. dollar and expectations that Europe will be able to find oil elsewhere if Iran makes good on its threat to immediately halt exports to the region.
Benchmark crude for March delivery was up 6 cents at $99.76 a barrel at midday Bangkok time in electronic trading on the New York Mercantile Exchange. The contract rose 30 cents to finish at $99.70 per barrel on the Nymex on Thursday.
Brent crude for March delivery was up 19 cents at $110.98 on the ICE Futures Exchange in London.
The latest threat from Iran follows a European Union decision to enforce an oil embargo against Iran starting this summer because of Iran's secretive nuclear program.
EU nations account for about 18 percent of Iran's oil sales, and Iranian lawmakers think cutting off oil to Europe would hurt those nations more than it would Iran.
But analysts said the shortfall to Europe could be made up with other suppliers.
"Our view is that any shortfall in oil supplies will be offset by increased crude supplies from other regions, including Saudi Arabia, Libya and Iraq," said Natalie Robertson, commodities analyst at ANZ Banking Group in Melbourne.
She said oil prices were also supported by pledges this week by the U.S. Federal Reserve to keep interest rates at record low levels through 2014. The move weakens the dollar and makes dollar-priced oil less expensive for investors with other currencies.
Oil prices — which rose above $100 a barrel Wednesday — have been nudged higher this week on Western naval buildups in the Persian Gulf and Iran's threats to close the oil tanker lanes through the Strait of Hormuz, the route for about one-fifth of the world's crude.
The EU embargo announced Monday is the latest attempt to try to pressure Iran, the world's third-largest oil exporter, over a nuclear program the United States and its allies argue is aimed at developing nuclear weapons but which Iran says is for purely peaceful purposes.
In other energy futures trading, heating oil rose 0.4 cent to $3.05 per gallon and gasoline futures were steady at $2.85 per gallon. Natural gas fell 2 cents to $2.58 per 1,000 cubic feet.